Danny Meyer has long been a name to be reckoned with in the fine-dining world, so when his company, Union Square Hospitality Group, unleashed a hot dog cart in New York’s Madison Square Park in 2001, people took notice.
The stand was erected to support the Madison Square Park Conservancy’s first art installation, and for three years cart enthusiasts queued up to eat there. Then, in 2004, the company won the right for a permanent kiosk in the park, and Shake Shack was officially born.
“What we always like to remind people is the cool thing about Shake Shack is that it was an accident,” said Randy Garutti, Shake Shack’s chief executive. “It took us five years to open the second Shake Shack, and from there we have grown slowly. The beauty of it is, we never set out to do this; we set out to have a cool community gathering place in the middle of the park.”
Since that time, Shake Shack has expanded to 22 locations, with 13 company-owned units and nine licensed partners around the world, and a goal of providing flavorful, quality menu items and ingredients to its customers.
“We believe our consumer is the person who says, ‘I don’t eat at fast-food restaurants, but when I choose to eat a burger or fries or a shake, I want a good one, and that’s why I’m coming to Shake Shack,’” Garutti said. “We all should have a burger every now and again, and we want them to be proud of walking down the street with a Shake Shack bag, just as you would be with a Whole Foods bag.”
The menu at Shake Shack is simple: burgers, fries and shakes, but done in a way that innovates around the core.
“A lot of people have great burgers and frozen custard and shakes and fries; we believe we do those exceptionally well, but it’s really about the whole package when people experience us,” Garutti said. “On top of that, there’s our tradition of fine dining and hospitality, our all-natural, no-hormone beef and the ways we lead the industry in combining premium ingredients and incredible value, all put together with amazing design.”
Over time the company has been moving in a more healthful direction, he said. That includes putting organic items on the menu, such as its coffee extract for coffee shakes. All shakes are prepared from freshly made frozen custard every day, and that custard never sees day two.
Recently, Shake Shack added hormone-free bacon, and 2013 will see the introduction of hot dogs and chicken dogs made with all-natural products.
“Little by little, we continue to chip away to raise the level of what we’re doing,” Garutti said. “More than ever, people understand where their food is coming from and appreciate the amount of thought we put into the power of sourcing.”
Clark Wolf, president of Clark Wolf Company, a food and restaurant consulting firm, said he believes Meyer’s reputation had a halo effect, making people feel comfortable and interested in the Shake Shack idea.
“There was a lot of press behind this — it was a PR machine — and at the same time, the economy [was bad], and people were falling in love with hamburgers again and wanted a reason to spend a lower amount of money on something perceived as good,” Wolf said. “Right now Americans love burgers and New Yorkers, and I don’t see any glitches in their business plan. I think they have to be careful with price points for new entries — they can probably raise prices, but not too far.”
Shake Shack has a motto to “think small while doing big things,” and its leaders say they refuse to cut corners as it grows.
“We want to be effective and better as we get bigger,” Garutti said. “In 2013 we will probably add seven or eight domestic Shake Shacks and a similar number internationally with our partners there. If we can open a restaurant and every time we do it becomes a community center for that city or town, we’re going to keep opening restaurants. We’re not going to outpace our ability for the same great experience Shake Shack has become famous for.”
